Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

British business `badly prepared' for introduction of euro

  • @yvettecoopermp
British business is badly prepared for a single currency, and could lose out as a result, irrespective of whether or not sterling is in the first wave, two reports warn today.

According to one of them, produced by a group of Britain's top finance directors, fewer than one in five companies has a strategy in place for dealing with economic and monetary union.

The report by the Hundred Group, which represents the finance directors of Britain's biggest companies, says business needs to prepare urgently for the development of a large European capital market that could offer a cheaper and more liquid form of long-term finance. Banks also need to position themselves to offer a pan-European service and the changes in cash handling systems that will result from the introduction of the euro.

Meanwhile, a survey of 250 European company directors, commissioned by information technology consultancy ECsoft Group, found British companies lagging behind in the IT changes needed to cope with the euro. It said that 17 per cent of British companies questioned were planning EMU-related investment in IT, compared with 56 per cent of German firms.

Brian Birkenhead, chairman of the Hundred Group, said: "British business has a lot of work to do regardless of whether the UK is in or out of a single currency."

Launching the report, The Single European Currency: a Practical Guide, Mr Birkenhead said there was no certainty that monetary union would go ahead on the planned date of 1 January 1999. "But businesses would be ill advised to assume it will not," he said.

Even if the UK does not join the single currency, the Hundred Group warns that Britain's continuing commitment to the single market will require careful management to avoid jeopardising the UK's EU trading links.